Home Retail Group has revealed it is in talks to sell Homebase to Australian retailer Wesfarmers for £340m.
In its trading update for the 18 weeks from 30 August to 2 January, the retailer said it had “progressed discussions for the sale of Homebase to Wesfarmers” as well as receiving an offer from Sainsbury’s.
Sainsbury’s made an offer for the group, which also owns Argos, in November, which was rejected.
On Wednesday it revealed its case for buying HRG, highlighting the benefits of combining its supermarkets business with Argos.
It must now wait to see if a deal between HRG and Wesfarmers proceeds before it makes a move on whether to buy the remainder of the group.
Home Retail Group’s Argos’ like-for-like sales decreased by 2.2% in the 18 weeks form 30 August to 2 January.
New digital concessions, which had been added to the portfolio in the last year contributed 3.1% to growth.
At Homebase, like-for-like sales grew by 5% while total sales declined by 4%.
HRG said Homebase’s aggressive store closure program has positioned it as a smaller, more effective business.
John Walden, chief executive of Home Retail Group, said: “As a result of the most recent trading period, we expect that Group benchmark profit before tax for the financial year ending February will be around the bottom of the current range of market expectations of £92m to £118m.”
